Every week I see more Direct Routing for Microsoft Teams ads and tweets; more XYZ for Teams. The industry is back to selling dial-tone, minutes and texts.
UCaaS has tanked. The price per seat has declined. Except as phone system replacement, it doesn’t have much sizzle because the vendors never did anything to give it sizzle. They all played follow the leader.
This is for the Product Leaders in the UCaaS space: Quit. You obviously have no idea who your Ideal Buyer is – or even who you are building the product for. You think you are selling Cheerios that will appeal to everyone and you are wrong. PBX sales are not tanking as fast as the UCaaS seat price which means You Do Not Know Who Your Buyer is (or what Pain you solve for!) These are Basics!
If the Product Leaders knew who they were building for more providers would look like Weave and less would look like either RingCentral or Webex.
There are new vendors still entering the space thinking that the market is untapped. It isn’t Untapped. That TAM projection is utter bullshit written for the gullible and the investors. The TAM is wrong because you think UCaaS will replace all PBX, but actually MS Teams is replacing all UCaaS – with 300M monthly users out of about 400M desktops.
It is that number that drives vendors to chase the dial-tone for MS Teams. And, hey, the channel is great at transactional selling. POTS replacement, LD, broadband, now DR4MST.
Product Leaders: moving to UC+CC will be a harder sale. It will require Sales Engineers or at the least Subject Matter Expert overlays who understand the product and the competition. It would be so much wiser to move to a Vertical.
Integrations are where it gets sticky and efficient. However, everyone integrates into to the same 10 SaaS apps. Once again follow the group instead of finding out what apps Your Ideal Customer uses and integrate into that! But no that would be too hard. We would have to identify the Ideal Customer and then talk to them. Eee gads!
Oh and the market will shrink. We won’t be able to say that the TAM is $200B if we only work in 3 Verticals. We will have to say that the TAM is just $3B and we can capture 20% of it, but with stickier customers paying a profitable ARPU, lower churn and a much clearer go-to-market plan.
There are 330K dentists in the US. Take just 10% of that vertical and with 33K customers, you have a business larger than USLEC (26K customers).
You can’t displace MS Teams, but that’s okay. It is mainly collaboration and internal comms. It is predominant in mid-size and large business. Like Weave, look at ways that you can provide self-serve and improve the customer experience with real world stuff and take out the acronyms. Insurance verification, payment, appointment reminders, scheduling – all this is real world improvement for SMB. All of this is at $75 per seat. They don’t delineate between what is CCaaS or UCaaS or CPaaS – they just provide a solution. That’s the whole point. And if you notice, MS Teams isn’t in that picture.
To get in the mud and fight for minutes again… no thanks. I don’t know many partners who were happy selling $10 seats. And with the commissions changing and, in some cases like RNG, becoming so convoluted, selling UCaaS isn’t worth the squeeze. It is a lot of work when you can go sling other stuff – and right now the channel partners have a Wally World Worth of Products available to sell from Energy to Smart Building to EV Charging to 5G Private Networks to SD-WAN to security, backup, managed services, pro services, AI, AR/VR – why would they get in the mud and fight over UCaaS seats?